Fortis-CH Energy deal comes under fire at hearing in Kingston

KINGSTON, N.Y. -- Thursday night's fourth state hearing on the proposed $1.5 billion takeover of CH Energy Group by Canadian energy company Fortis Inc. drew 85 people to Kingston City Hall, and speakers, like at the previous sessions, were firmly against the deal.

Some 27 people signed up to speak at the Public Service Commission hearing, which came 24 hours after the commission held a hearing in Poughkeepsie about the proposed buyout of Central Hudson Gas & Electric Corp.'s parent company.

Kingston Alderwoman Elisa Ball read a statement on Thursday from state Sen. Cecilia Tkaczyk, D-Duanesburg, that called on the state commission to pay attention to the financial impact on ratepayers.

Advertisement

"I have several concerns about the proposed acquisition, the first based on reports that Fortis will take on new debt in order to fund this acquisition," Ball, D-Ward 6, read from Tkaczyk's statement. "Will this new, increased debt burden result in higher rates for residents and businesses?"

The hearing, which began at 7 p.m., still was in progress nearly two hours later.

The hearing was preceded by a press conference organized by a group called Citizens for Local Power.

Area government officials and union representatives spoke at the event, which drew state Administrative Law Judge David Prestemon and Public Service Commission member Gregg Sayre as spectators.

Paul Ellis-Graham, representing Central Hudson employees who are in Local 320 of the International Brotherhood of Electrical Workers, said the promise by Fortis to maintain local staffing levels for only two years should be a warning that change is likely.

"If we let Fortis come into our communities and contract this work out, we will face a litany of challenges," Ellis-Graham said. "(Employees) will be out of work and unable to contribute to our communities. Service will ultimately be slowed as there will be a loss of in-house knowledge."

Gerard Lyons, a member of Local 200 of the Service Employees International Union, said Central Hudson has gained a positive reputation by having a strong union workforce that cares about local residents.

"Central Hudson, with its union workers, (was) prepared when the storms hit," he said.

"The proposed takeover does nothing to make Fortis improve the power grid, protect us from the effects of storms like Irene, Lee and Sandy or better utilize clean energy sources," Lyons said.

Town of Rosendale Supervisor Jeanne Walsh said at the press conference that she was concerned Central Hudson will lose its close relationship with local officials during emergencies if Fortis takes over.

"I was very impressed with Central Hudson the way they handled Hurricane Sandy," she said, referring to the October 2012 superstorm. "I was amazed that there was so much organization. Every day, every supervisor in every town throughout their (Central Hudson's eight-county coverage) area ... was in constant contact. ... (The company) really communicated with all the towns, and I really need to know that is going to be the case if a new company comes in."

Attorney Dan Duthie said at the press conference that the buyout proposal, which includes $49.25 million in public benefit funding, falls short of previous takeovers approved by the Public Service Commission.

"Con Edison ratepayers got an immediate reduction in rates," he said. "Together, the rate benefits in terms of Orange and Rockland and Con Edison customers approached $100 million. That's in 1999 dollars. You can figure out what that's worth today."

Duthie also said Fortis has not discussed how it would work toward improving the environment.

"There isn't any mention of a new approach to a sustainable environment or sustainable community," he said. "The track record we've seen ... (includes) a hydro(electric) plant in Belize, in a rain forest no less, and the fact that they so mismanaged that project, it resulted in rates that were so high, the government had to come and expropriate it."

The Public Service Commission's public comment period on the proposed Fortis-CH Energy deal, which was proposed 14 months ago, runs through May 1. After that, it could rule immediately on the plan, ask for revisions to it, ask commission staff members to investigate the proposal further or even schedule additional public hearings.

No timetable for the commission's next step or steps has been announced.